Google Plans Fiber Growth and Looks to 34 Potential Cities

Google Inc., based in Mountain View, California, is challenging companies such as Comcast Corp. and AT&T Inc. by providing Internet and television service and promoting network speeds that can be 100 times faster than current choices. Photographer: Julie Denesha/Bloomberg

Feb. 19 (Bloomberg) -- Google Inc. is initiating talks with
nine U.S. metropolitan areas about bringing its high-speed
broadband Internet service to consumers, as the search provider
steps up competition with cable and phone companies.

The potential regions include 34 cities, from Portland,
Oregon, and San Jose, California, on the West Coast to eastern
U.S. cities Atlanta and Charlotte, North Carolina, Google said
today in a blog post. The company is working with city leaders
to determine the best locations for the fiber lines and will
provide updates about the areas it chooses by year end.

Google, based in Mountain View, California, is challenging
companies such as Comcast Corp. and AT&T Inc. by providing
Internet and television service and promoting network speeds
that can be 100 times faster than current choices. Fiber
projects are already underway in Kansas City, Kansas, Austin,
Texas, and Provo, Utah.

“Google is taking the long view,” wrote Carlos Kirjner,
an analyst at Sanford C. Bernstein & Co., in a note to clients.
“In five or more years, it could turn out to be a significant,
profitable business for Google and headwind for incumbents.”

Cable company shares fell after the announcement. Comcast
dropped 3.7 percent to $51.57 at the close in New York, and Time
Warner Cable Inc. dropped 2.8 percent to $141. Comcast agreed
last week to buy Time Warner Cable for $45.2 billion in stock.

When reviewing potential markets, Google said it will
consider characteristics such as topography, housing density and
the condition of infrastructure. Participating cities will need
to provide maps of water, gas and electricity lines.

“People are hungrier than ever for faster Internet, and as
a result, cities across America are making speed a priority,”
Google said.

Google shares fell less than 1 percent to $1,202.34 today
after reaching a record yesterday. The stock has climbed 49
percent in the past year, double Comcast’s advance.